Financial Conduct Authority (FCA) UK Regulation Sample Exam

Which of the following would be an offence under the Proceeds of Crime Act 2002, Part 7 Money Laundering?

1. A firm’s nominated officer suspects money laundering is occurring, but delays disclosure to authorities by a week

2. A firm discloses suspicions to the authorities the next day

3. A firm informs its clients about potential money laundering activities

4. A firm conducts due diligence without suspicion

The correct answer is: A firm’s nominated officer suspects money laundering is occurring, but delays disclosure to authorities by a week

The selection is correct because under the Proceeds of Crime Act 2002, a nominated officer of a firm has a legal obligation to report any suspicions of money laundering promptly. The law requires that suspicions be disclosed to the relevant authorities without unnecessary delay. If a nominated officer suspects that money laundering is taking place and procrastinates in making this disclosure, even if the delay is only a week, this constitutes an offence. Timely reporting is crucial for the authorities to investigate and take appropriate action, and any unnecessary delay undermines this process. In contrast, disclosing suspicions the next day aligns with the legal requirements and does not constitute an offence. Informing clients about potential money laundering activities would also be a breach of legal and professional obligations, as it can compromise investigations and alert wrongdoers. Conducting due diligence without suspicion is a standard practice expected under the regulations; it does not involve any wrongdoing. Thus, only the delay in reporting suspicions by the nominated officer represents an offence under the provisions governing money laundering.